22 October 2017
Find out more

US Supreme Court upholds Visa and MasterCard ruling

04 October 2004  |  6744 views  |  0 Visa

The US Supreme Court has upheld a ruling that Visa and MasterCard violated federal antitrust laws by banning their member banks from issuing cards from rival firms such as American Express and Morgan Stanley Discover.

The court rejected two separate appeals from MasterCard and Visa.

The appeals stemmed from a US government antitrust lawsuit brought by the US Justice Department against Visa and MasterCard in 1998, which claimed exclusionary rules preventing banks from issuing rival cards were anti-competitive.

A federal judge in New York ruled in 2001 that the rules were unlawful. A US appeals court upheld that decision last year. Visa and MasterCard, which have argued that the rules do not hurt competition, appealed to the Supreme Court.

In a statement issued immediately after today's ruling, David Nelms, chairman and CEO, Discover Financial Services, says: "This is a victory for consumers, merchants and financial institutions. Today's decision frees financial institutions to partner with Discover Financial Services, which will provide more choice and value to consumers and merchants."

In a separate statement, Kenneth Chenault, chairman and CEO, American Express, says: "The Supreme Court's decision means the end, once and for all, of Visa and MasterCard rules that have prevented banks from issuing cards on rival networks.

"In effect, the Court has decided that these rules are illegal and must be abolished."

Hitting back at American Express, Daniel Tarman, SVP, Visa USA, says: "American Express competes against Visa's members to market their own brand to the banks' payment card and financial services customers."

According to a report by the Financial Times, American Express and Morgan Stanley's Discover credit card business will file a lawsuit against Visa and MasterCard claiming up to a billion dollars in damages, following the Supreme Court's decision.

The two firms claim that Visa and MasterCard's actions in barring member banks from issuing rival credit cards in the US over the past decade was anticompetitive and deprived them of hundreds of millions of dollars in business.

Discover confirmed it was filing a lawsuit against Visa and MasterCard directly after the US Supreme Court rejected the appeals. Nelms says: "Now that Visa and MasterCard's anticompetitive bylaws have finally been struck down as unlawful, we are moving forward with our business plans and are seeking triple damages for the harm that those violations have caused us."
KeywordsLEGAL

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Visa and MasterCard to appeal Australian Federal Court reform ruling

Visa and MasterCard to appeal Australian Federal Court reform ruling

10 October 2003  |  5652 views  |  0 comments
Visa and MasterCard ordered to repay consumers $800 million

Visa and MasterCard ordered to repay consumers $800 million

09 April 2003  |  5041 views  |  0 comments
Judge throws out Visa/MasterCard motions in merchant suit

Judge throws out Visa/MasterCard motions in merchant suit

02 April 2003  |  5288 views  |  0 comments
Visa and MasterCard suffer second legal setback - FT

Visa and MasterCard suffer second legal setback - FT

19 October 2001  |  3590 views  |  0 comments
US court slaps down Visa and MasterCard

US court slaps down Visa and MasterCard

10 October 2001  |  4102 views  |  0 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.atos.netvisit www.fivedegrees.nlvisit www.vasco.com

Top topics

Most viewed Most shared
HSBC partners Bud for open banking trialHSBC partners Bud for open banking trial
10726 views comments | 22 tweets | 26 linkedin
Mastercard to roll out blockchain APIMastercard to roll out blockchain API
10426 views comments | 17 tweets | 24 linkedin
satelliteGates Foundation backs Ripple collaboratio...
9126 views comments | 13 tweets | 10 linkedin
IBM uses blockchain to improve cross-border payments processingIBM uses blockchain to improve cross-borde...
8184 views comments | 9 tweets | 17 linkedin
Sibos 2017: API or the highwaySibos 2017: API or the highway
8033 views comments | 10 tweets | 22 linkedin

Featured job

Competitive base, commission, benefits
London, UK

Find your next job